Houston Inc

question 10

Multiple Choice

Houston Inc.is considering a project which involves building a new refrigerated warehouse which will cost R7,000,000 at t = 0 and which is expected to have operating cash flows of R500,000 at the end of each of the next 20 years.However, repairs which will cost R1,000,000 must be incurred at the end of the 10th year.Thus, at the end of Year 10 there will be a R500,000 operating cash inflow and an outflow of R1,000,000 for repairs.If Houston's required rate of return is 12 percent, what is the project's MIRR? (Hint: Think carefully about the MIRR equation and the treatment of cash outflows.)

• A) 7.75%
• B) 8.29%
• C) 9.81%
• D) 11.45%
• E) 12.33%

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Definitions:

Minimal Change Nephrotic Syndrome

A kidney disorder causing significant loss of proteins in the urine, leading to swelling and minimal change seen in kidney tissues.

Corticosteroids

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Minimal Change Nephrotic Syndrome

A kidney disorder mostly seen in children that leads to significant proteinuria, swelling, and risk of infection, but with minimal changes seen in kidney tissue under a microscope.

Prednisone

A synthetic corticosteroid drug used to suppress the immune system and reduce inflammation in conditions such as asthma, arthritis, and allergic reactions.